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Cyprus

€140 million in development loans not been spent

Governor of the Council of Europe Development Bank (CEB), Rolf Wenzel

Around €140 million of loans approved for projects in Cyprus has not yet been released due to delays caused by the economic recession, Governor of the Council of Europe Development Bank (CEB), Rolf Wenzel said in an interview with the Cyprus News Agency (CNA).

CEB is the oldest European Development Bank, founded in 1956 originally to help refugees of WWII. The bank is mandated with financing projects that support social cohesion across Europe, such as social housing for low-income families, financing small and medium enterprises, and projects to prevent natural catastrophes.

Cyprus has been a member of the bank since 1962, and has received loans of about €2 billion. CEB has financed projects for tourism, water sewage facilities, schools, villages and communities in Cyprus. It has also extended a €70 million loan to the University of Cyprus for the construction of the new campus.

CEB also approved a loan of €40 million for the rehabilitation of Nicosia’s city centre. During his visit to Cyprus, Wenzel met Nicosia mayor Constantinos Yiorkadjis and informed him that there was still €20 million outstanding from the loan, not yet released because of delays in construction works.

The Governor said he was impressed with the briefing he had from the Central Bank of Cyprus and the improvement of all economic indicators, and noted that “now is time to look at the projects that have been approved by our boards and the bank and to move forward to the disbursement”.

“We have altogether about €140 million awaiting disbursement. So we have seen unfortunately that the crisis led to some delays in project implementation – understandably though, because the country was busy addressing the macroeconomic issues,” he said.

He added that now that is time for the projects to proceed, since the economy has returned to economic growth.

Wenzel pointed out that the bank is in constant touch with Cyprus’ representatives to see what they could do to make progress on some of the projects.

“We didn’t stop our cooperation when the crisis started in 2013, on the contrary we continued to work very closely, we continued to work on the projects that were there. We discussed downsizing some of the projects but we didn’t do that,” he said.

He added that they have agreed with the Cypriot authorities to wait for the economy to improve before making final decisions.

“So that means that some of the projects were extended,” he said.

The Governor said that he had seen and heard some ideas for financing new projects in future, and that he had discussions at the highest level with government representatives.

“My visit here is a signal of our trust and confidence, and we are grateful for the strong commitment that Cyprus has shown to the bank in a difficult time for the country. Cyprus always met its obligations to the bank,” he said.

Asked about the prospect of financing the reconstruction and reunification of the island after an settlement of the Cyprus problem, the Governor said they will have to wait for the final outcome, noting however that the international community will appreciate and welcome a solution to the division of the island.

“Then we will have to see what we can do to help. But we will have to wait for the final outcome,” he said.

He also said that his institution as other financial institutions the International Monetary Fund, the European Bank for Reconstruction and Development and the European Investment Bank are all watching and hoping for the best and then they will see that their contribution could be.

“Clearly there will be huge investment opportunities also for the private sector, especially in the fields of tourism and services industry,” he said.

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